Tuesday, May 31, 2011

Second Wave

Go to Google news and you will find a lot of articles about how the real estate market is going through the double dip.

Every real estate expert/journalist is giving their opinion about this matter. I am no different.

There is still a huge divide between buyers and sellers in terms of what a property is worth.

Sellers are over leveraged and they need to get as much as they can out of their properties. They do not want to be on hook for anything that is owed. It is also a matter of pride. A seller who blew a wad on a property has no desires to cut and run.

Cash is king. But only if you have it. And even if you do have it that does not mean you want to spend it. In a recent article about Jamie Dimon, his company is still hurting from the mortgage meltdown.

Easy financing is available, but you need to put at least 60% down. And if you are going to be putting down that much, you might as well buy the whole thing in cash. And buyers are not willing to commit that much money to a property and the only way a deal can happen is if prices fall.

From residential to commercial, everyone is hurting in some degree. Be very wary of anyone claiming that everything is honky dory. It is not.

If this debt ceiling crap is not resolved, this will be a summer that won't be forgotten for quite sometime.